Channel 20 deal will bulk up TV ad buys, watchers say

The local media market is taking on an infusion of new content from WXYZ-Channel 7, and media watchers say it is expected to stir up the competitive landscape for audience and advertising — and pique interest in bundled TV ad buys.

The $110 million cash purchase that added WMYD-Channel 20 to E.W. Scripps Co.'s TV station portfolio last week was the first step in Scripps' plans for the MyNetwork TV affiliate.

Cincinnati-based Scripps, which has owned WXYZ in Southfield since 1986, closed Monday on the deal to acquire Channel 20 and ABC affiliate WKBW in Buffalo, N.Y., from New York City-based Granite Broadcasting Corp.

Scripps marked the occasion, and signaled its strategy, by launching a new 10 p.m. newscast, "7 Action News at 10 on TV20 Detroit," that very night. But WXYZ also plans to keep at least 20 of the 30 Granite employees in the region, add a new 7 a.m. news hour on WMYD this summer, put two more news programs into rotation this fall and add at least 40 new local media jobs this year.

Channel 7 will continue to have its early morning news show that leads into the station's broadcast of "Good Morning America."

Ed Fernandez

"We think we do very well in the early mornings, and this is a good opportunity to retain the viewers who were already enjoying us or just add those who want to stay with local updates, after the (program change) to 'Good Morning America,' " said Ed Fernandez, Scripps divisional general manager and vice president and general manager of WXYZ.

Also in the offing is a new 4 p.m. newscast, "The Now," starting Sept. 8 on WXYZ (moving "The Dr. Oz Show" to 10 a.m. for its sixth season), and "The List," a Scripps information and entertainment program that will expand to five new markets, including Detroit at 7:30 nightly starting Sept. 9.

"The List" also will include Detroit-produced segments.

All told, Fernandez said, the expansion will grow the station from more than 190 employees to 250 by late fall.

The company has retained "about two-thirds" of the approximately 30 former WMYD employees, including all of its sales staff, to coordinate media buys, Fernandez said. Most of the remainder, including a few editorial employees, are still in discussions with WXYZ. (Former WMYD General Manager David Bangura joined Adell Broadcasting Co.'s WADL-Channel 38 as president and general manager last week.)

"We are also still exploring other opportunities to expand programming on 20 as we move along, but that's all coming together on a case-by-case basis," he said. "We have some ideas, but it's too early to lay them out in detail."

Matt Friedman

Bundled buys?

The 10 p.m. newscast could be an audience-builder for WMYD since it already seems to feature some new or original reporting, rather than repurposing news content from WXYZ's earlier broadcasts, said Matt Friedman, a former news producer at WDIV-Channel 4 and co-founder of public relations firm Tanner Friedman in Farmington Hills.

"What Channel 2 (WJBK-TV2) has proven is there is great demand for that programming and for morning traffic and weather and other reporting, even after the traditional turnover to the networks. And it sounds like Channel 7 is realizing they don't want to cede that entire market to someone else," he said.

"So this gives them some flexibility, and Channel 2 is a natural target to compete for viewers now. That's a strength of the strategy — a weakness of the strategy is this might be the worst moment for syndicated programming, so how are they going to fill their day (at 20)? And do they fill it with content relevant to advertisers?"

Friedman also said the acquisition gives Scripps the opportunity to bundle sales to various advertisers, giving WXYZ a second asset and greater exposure for media buyers in the Detroit market.

Fernandez said the former Granite employees will continue to sell Channel 20 advertising time for now. The new local newscasts will largely use current Channel 7 on-air talent, but the increased newscast content will increase the station's need for producers and other support positions, he said.

"That (advertiser bundling) is something that's still getting worked out. We'll make that determination as we move along," he said.

Friedman said generating original new content on Channel 20, rather than recycling news from earlier broadcasts as some stations that shared owners have done in the past, might build a new audience and greater advertiser appeal than Channel 20 previously enjoyed.

The former WMYD 10 p.m. newscast was one of several newscasts produced and anchored by Granite's Indiana's News Center at WISE-TV in Fort Wayne, Ind., with Detroit-based reporters contributing stories. Fernandez said fewer than half a dozen WMYD employees were news staff.

Friedman said a similar arrangement was in place when he joined the staff of WCPX-TV, a CBS affiliate in Orlando, Fla., that also contributed a newscast to the then-WB Network affiliate WKCF in the mid-1990s splitting its advertising revenue. That newscast's ratings were modest but improved substantially, he said, after WKCF began generating new material for it.

"Once we started doing good stories, people sort of found it, and the brand confusion of (being on a different station) really just went away," he said.

Patti Harrison

Building networks

Patti Harrison, owner and president of Clinton Township-based media buying company Harrison Media LLC, also said Scripps is known for top-notch local news content and will be an appealing change for WMYD. Like Friedman, she also thought the purchase benefits WXYZ as well.

"We have not really been purchasing WMYD in a number of years because of low ratings and interest and the competition in that (station format) from cable," she said.

"But the news audience for TV tends to skew older, which aligns nicely with our clients in the health care business. This means a lot of new competition to WJBK-Fox 2 as well, and WXYZ has struggled in certain periods where they (Fox 2) aren't as constrained by the same network obligations. So this is an opportunity."

Granite bought WMYD, then WDWB, in 1997 for $175 million. In 2006, it became a part of the MyNetworkTV station network formed by Fox parent News Corp. for stations orphaned by the merger of WB and UPN, which resulted in the CBS- and Warner Bros.-owned The CW Network.

WXYZ is Scripps' largest television station owner, reaching nearly 2.7 million households in the metro Detroit market. Scripps (NYSE: SSP) in 2013 reported a net loss of $474,000 in 2013 on revenue of $816.9 million. It is separate from Scripps Network Interactive (NYSE: SNI), which owns lifestyle brands such as HGTV and Food Network.

Friedman and Harrison both said the possibility of fewer advertising outlets for the two stations should not hurt ad pricing much for Detroit.

"There are too many other options. Contrary to some perception, TV is still a predominant medium for people to get their information," Harrison said. "But the bigger threat to all these stations is everything going on outside of TV."